Neighborhood Insurance sells fire insurance policies to local homeowners. The premium is $150, the probability of a fire is 0.1%, and in the event of a fire, the insured damages (the payout on the policy) will be $140,000. a. Make a table of the two possible payouts on each policy with the probability of each.

b. Suppose you own the entire firm, and the company issues only one policy. What are the expected value, variance and standard deviation of your profit?